ADR is the English acronym for "Alternative Dispute Resolution", a way to solve conflicts without court litigation. With the current proliferation of transnational R&D projects and the increasing awareness of the importance of protecting and exploiting Intellectual Property (IP) assets for business success, a good number of disputes could end up in court. The resolution of these disputes often requires court proceedings in different jurisdictions and therefore, time, money and the possibility of conflicting outcomes.

In order to avoid that, in the IP field and particularly in an international context, instead of taking someone to court disputes are being solved using other mechanisms, closer to the parties' interests.

Arbitration and mediation are the most common ADR procedures:

Arbitration

In arbitration, the dispute is settled by an impartial expert/s (the arbitrator/s), who give/s a binding decision (arbitral award) that can be enforced in many countries (thanks to the New York Convention 1958), without a review on the merits.
Mediation

Mediation is a more amicable system, as there is no binding decision but a third party (also an expert on the matter being disputed) who helps parties to bring their positions closer. This method helps the parties involved to preserve, or even improve, their business relationship.

Main features shared by the ADR procedures:

a) Consensual and single procedure

Parties have a lot of control over the settlement of their dispute. They decide who will arbitrate or mediate the dispute, how and where (parties may decide, e.g., the applicable law to their arbitration, language of the procedure and the location of any meetings).

Choosing the language of the procedure, for example, is of great practical importance. ADR procedures give the parties the possibility to choose the language in which they prefer to follow the process, while in a national court it is not easy to deal with cross-border disputes, taking this aspect into account.

In addition, even if the IP in dispute may be protected under different national legal systems, there is just one outcome.

b) High expertise of the third party

The third party who either settles the dispute (arbitration) or helps the parties to do it (mediation) is a leading expert in the technical field of the dispute, usually chosen by the parties from a list of experts. (In many jurisdictions judges lack specialised knowledge in IP matters. They generally need to consult experts during the proceedings, while in ADR procedures, the expert is the person settling or helping to solve the dispute.)

c) Time (and cost) effectiveness

ADR procedures can be quicker than court litigation. According to some statistics, many mediations end, successfully, after the parties' first meeting with the mediator.

The integration of electronic means into the ADR mechanisms is obviously an advance, because it is also less time consuming from the point of view of the administrative formalities. A good example of this is the Electronic Case Facility (WIPO ECAF) of the Arbitration and Mediation Center of the World Intellectual Property Organization (WIPO), established to make communications between the parties easier. This tool allows the parties, on the one hand, to be regularly updated and on the other hand, to add useful information and additional documentation, if they believe it could be useful to their case.

Finally, ADR costs usually depend on the complexity of the matter and the amount in dispute. ADR procedures generally foresee 50/50 cost sharing, with the possibility for the parties involved to agree otherwise. In any case, even a fairly expensive procedure may still be preferable to litigating in several jurisdictions.

d) Secrecy

Confidentiality is one of the reasons that leads companies to choose ADR. Many firms prefer, in cases where internal issues would be discussed, not to be involved in public hearings that could damage their image. In cases concerning trade secrets, for example, confidentiality is crucial.

Although ADR may be chosen once a dispute has arisen it is preferable to include an ADR clause in the contract regulating the parties' relationship. Depending on factors such as their experience, parties may organise the procedure themselves (the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), are specially designed for ad hoc proceedings) or appoint an ADR institution to deal with the administration of the dispute. There are many institutions that offer ADR and provide support (lists of experts, meeting rooms, translation facilities, etc.) The WIPO Arbitration and Mediation Center is the only international institution focusing on IP and technology disputes. Other institutions are involved in commercial disputes, such as the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) or the American Arbitration Association (AAA).